Esta ley establece un plan de pago para los participantes activos del Sistema de Retiro de los Empleados del Gobierno de Puerto Rico e Instrumentalidades, permitiéndoles pagar los intereses acumulados por contribuciones adeudadas por años de servicio no acreditados a una tasa de interés especial del 6% anual. Los participantes tienen 12 meses desde la fecha de efectividad de la ley para acogerse al plan, deben tener no más de 10 años restantes para ser elegibles a una pensión por mérito, y deben pagar el principal adeudado en el plazo de un año mientras estén en servicio activo. El pago de los intereses se realizará mediante descuentos de la nómina o de la anualidad de pensión, comenzando una vez que el participante reciba su pensión y haya pagado el principal, y no se extenderá por más de 60 meses. En caso de fallecimiento del pensionado, la deuda restante se cargará a los beneficios por muerte o a los beneficios de pensión por muerte.
(Approved July 2, 2002)
To grant a payment plan to participants in active service of the Retirement System of Employees of the Government of Puerto Rico and its Instrumentalities for interest accrued on account of contributions owed for years of service not accounted, at a special interest rate, if they avail themselves of the same within the next twelve (12) months counted from the date of effectiveness of this Act.
Act No. 447 of May 15, 1951, as amended, created a retirement and benefits system for public employees. At present, many public servants find it impossible to have their unaccounted years of service accredited in the Retirement System of the Employees of the Commonwealth of Puerto Rico, due to the burdensome high interest they would have to pay on their respective retirement accounts. This measure has the purpose of offering a viable alternative to active participants of the Retirement System, so that they may avail themselves of a reasonable payment plan for interest owed, without undermining the financial solvency of the Retirement System of the Employees of the Commonwealth of Puerto Rico.
The purpose of this Legislature is to deliver social justice to the public employees thus affected, by granting them a suitable mechanism for the payment of amounts owed. The participant shall pay the principal within the period of one year, and interest may be paid through an installment payment
plan, subject to a considerably low interest rate, which the participant shall begin to pay once he or she begins to receive his/her pension. Thus, public employees are not assaulted by the obligation of having to pay the interest immediately, but rather, payment is deferred until they are vested in their retirement pension. It must be pointed out that in many cases, the amount of debt corresponding to interest is much greater than the debt on account of principal, reason for which we believe that this measure will provide financial relief for public employees who wish to pay their contributions to the System but do not have the full amount of resources to do so.
We believe that with this Act, public employees and the Retirement System of the Employees of the Commonwealth of Puerto Rico meet halfway in which the financial impact is minimized and employees receive greater benefits in the long run.
Section 1.-A payment plan is hereby granted to the participants in active service of the Retirement System of Employees of the Government of the Commonwealth of Puerto Rico and its Instrumentalities for interest accrued on contributions owed corresponding to unaccounted years in service. If employees request the payment plan to the Retirement System, the same shall be granted at a special interest rate if they avail themselves thereof within twelve (12) months following the date of effectiveness of this Act.
Section 2.-Participants who opt to avail themselves of the payment plan granted by Section 1 of this Act shall have not more than ten (10) years left in service to be eligible to a pension for merit.
Section 3.-The simple interest applicable to the payment plan for interest accrued on unaccounted services shall be at an annual percentage rate of six (6) percent and the same shall be in effect from the date the participant avails him or herself of the payment plan to the date of extinction of the debt.
Section 4.-In order for a participant to avail him/herself of the payment plan for interest accrued on unaccounted services, he or she shall have one (1) year from the date of approval of the payment plan by the Retirement System or from the date of notice of the cost for unaccounted services, whichever occurs later, to pay the principal of the entire amount owed on account of contributions, while still in active service.
Section 5.-Payment on the installments of the payment plan for interest accrued on unaccounted services shall be made from the date on which the participant begins to receive his/her pension and has paid off the principal. The payments shall be made by means of a discount from the payroll while in active service and shall continue to be made by means of a discount on the annuity while receiving the pension. The Retirement System shall have the power to make the corresponding discounts. It is hereby provided that this payment plan shall not be extended for more than sixty (60) months as of the date of approval of the payment plan or the date of notice of the cost for unaccounted services, whichever occurs later.
Section 6.-If the pensioner were to die during the term of the payment plan provided herein, the difference owed shall be charged to the death benefits, and if necessary, by means of monthly discounts from the pension benefits granted on account of the death of the pensioner, until the debt is satisfied.
Section 7.-The Retirement System shall disclose the present measure by publishing it at least once (1x) in a newspaper of general circulation in Puerto Rico. The System shall also disclose this measure through the Agency Coordinator of Retirement Affairs and by a Circular Letter to the agencies and the municipalities.
Section 8.-This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 97 (H.B. 2471) of the $\underline{3}^{ ext {rd }}$. Session of the $\underline{14}^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to grant a payment plan to participants in active service of the Retirement System of Employees of the Government of Puerto Rico and its Instrumentalities for interest accrued on account of contributions owed for years of service not accounted, at a special interest rate, if they avail themselves of the same within the next twelve (12) months counted from the date of effectiveness of this Act, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $4^{ ext {th }}$ of March of 2004.
Elba Rosa Rodríguez-Fuentes Director